Up to $300 of Your Airline Ticket Can be Due to Taxes

Summary

Airlines have an advertised base fare, but also collect additional surcharges, which can be counted as the hidden part of the ticket because it is not explicitly listed in the base fare price.

For the flights we looked at, Delta, American, and United collect over 20% of the total ticket price as surcharges.

The total ticket price also includes taxes paid to the US and other countries. For domestic travel, taxes are about $7 of a ticket price, and for international travel from the US, taxes make up on average $130 of a ticket price.

Of the countries observed, Great Britain, Germany, and Mexico have the highest taxes - over $180 for flights to Great Britain.

Flight Taxes

With Airfare Transparency regulations being debated by Congress (1, 2), Hopper wanted to take a look at what taxes get added to a ticket price and who the money goes to. We looked at a sample of flights from the US to 13 popular international destinations and analyzed the price breakdowns. But before getting into the details, let's first go over what the different taxes and surcharges are and who they are paid to.

Table 1, shows the average taxes charged by and paid to the US government for any international and domestic flights. These are in US dollars. Both US and international carriers that have the US as a destination or origin pay this fee.

Tax

Cost ($)

International vs. Domestic

International Arrival/Departure Tax

$17.50

International

Transportation Tax

$17.23

Domestic

Immigration Fee

$7.00

International

September 11th Security Fee

$5.60

Both

Customs Fee

$5.50

International

APHIS Fee

$5.00

International

Passenger Facility Charge

$4.50

Both

Segment Fee

$4.00

Domestic

Table 1: US taxes charged to domestic and international flights

There are also taxes that are paid to different countries when they are the destination or an intermediate stop. Though in case of intermediate stop, only a small part of the fee is paid. Figure 1, shows a map of how high the added taxes in each country that we analyzed are. Great Britain has the highest taxes, followed by Germany and Mexico. Table 2 shows the list of the 10 most expensive taxes along with the country that they are charged by and paid to. Some of the taxes do vary by which airport in a specific country is used, but the variation tends not to be large. Great Britain not only is the most expensive overall, but also has the single highest fee.

Composition of a Flight Ticket Price

International routes have more taxes associated with them, and the components of a ticket prices can be broken down into taxes paid to the US, taxes paid to the destination, other taxes paid to a country in which there is a layover if the flight is not direct, surcharges and airline taxes which are paid to the airline, and the base ticket prices which is also paid to the airline. Figure 2, shows the breakdown by percent of the different parts of a ticket when flying from the US to the top 13 international destinations. The majority of what you spend on a ticket price is paid to the airline, with non-airline taxes accounting, on average, for about 10% of the total price.

However, because different countries have different taxes, the percent breakdown is slightly different when looked at by destination country (Figure 3).

Figure 2: Composition of an international ticket price

Figure 3: Composition of an international ticket price by destination

The breakdown of a ticket price also depends on the airline since different airlines allocated money between base price and surcharges/taxes differently. Table 3 shows the breakdown between base price and surcharges for domestic airlines. The total airline cost is the sum of base barice and surcharges/taxes paid to the airline and the % over vs. % hidden represent the base price fraction of the total airline cost and the surcharge/tax fraction of of the total airline cost respectively. Table 4 shows the same information for the top 10 international airlines (from the sample analyzed) with the highest hidden costs.

Data and Methodology

The data presented in this analysis comes from Hopper’s combined feed of Global Distribution Service (GDS) data sources which includes about 10 million queries and 1 billion trips per day. Demand is represented as the number of queries not actual ticket purchases, and is calibrated across all GDS sources for each market. Good deal prices are represented by the 10th percentile prices. For example if the 10th percentile price is $800 dollars it means that only 10% of trips are priced at or below this price.

7 Comments

Walt French

Alas, this article doesn't seem to do much to help consumers make choices re air travel.

I don't care whether England or Germany charges more tax; if I'm actually considering both destinations, what I care is the total cost of the ticket. I get that different countries levy different types of taxes at different amounts, but only a fool would pay more total to fly to Germany because you show that England's air taxes are higher.

OTOH, there MAY be different facilities charges at different airports that make a flight out of Oakland cheaper than out of SFO; seeing those charges separately—while still emphasizing the total ticket price that's relevant 98% of the time—might encourage me to look for alternatives.

Looking at my last receipt — which I got AFTER I'd selected my flight based on the total amount that appeared on my credit card — there were about $50 of miscellaneous taxes, all of which, after chasing down the gobbledygook codes, are entirely formula-based. Yes, they increased my ticket cost by about 13%, but on the other hand, I don't fly very often without using an airport, or enjoying TSA screening, so with the possible exception of the 7.5% US Excise Tax on the base fare, what's to complain about?

Finally, I'm confused: since some taxes are per-segment or per-boarding, while others are a percentage of the base fare, it's natural that the percentages would vary across airlines, simply by the routes they fly and their fare policies. If Delta was trying to sneak a “jet fuel surcharge” onto the bottom line, that'd be one thing, but I only found purely formula-based items that seem to be based on your tables that apply to ALL airlines. What's the big deal?

Thanks for your feedback. You're right that for a fixed route the total cost including taxes and fees is the key number, but as you note, taxes can vary significantly by destination, particularly across countries. Traveling to Europe for example, you can often save significant amounts by flying to and from a nearby country and using cheap internal options to get to your ultimate destination.

That being said, our main purpose with the article was to raise awareness of taxes and fees in light of the proposed Transparent Airfares Act, which would potentially allow airlines to advertise base fares without taxes, fees, additional services and surcharges.

Tony A.

Re: I don't care whether England or Germany charges more tax; if I'm actually considering both destinations
Well if you flying to BOTH places, then you can fly (stopover) to UK first, and then start your return trip from Germany.
The reason is that UK APD tax is charge for the OUTBOUND leg. So returning from another place will reduce your taxes paid.

Where knowing the cost of additional taxes and fees becomes critical occurs when one tries to use frequent flyer miles. Routing USA to anywhere through London can cost almost as much as another carrier's full ticket price PLUS all those miles. And, the fees seem to be based on "season of travel." British Air (American partner) + London is a killer combination.

I understand that taxes need to be paid on a ticket, that makes sense to me. And if there were a standard rate like sales tax - everyone knows what that rate is - then it would be easy to figure out the total costs. My issue is with "Carrier Imposed Fees". When I ask the carrier what that includes I don't get any firm answer or breakdown of this additional amount. For example the ticket I'm looking to purchase is $1,084 total. $458 of that is carrier imposed fees. No idea what this is. To Sandra's point, when I try to use frequent flyer miles, they don't cover these fees. So I'm stuck paying over $700 for a $1,000 ticket.

Typically the "carrier imposed fees" are classified as fuel surcharges, though this often seems to be just an accounting tactic by the airlines. Some airlines show a separate line item and some don't, but it is really only the total ticket price (including fees) that matters. I purchased a ticket recently where the ticket price was $20 and the "surcharge" was nearly $600! In some cases when you "buy" a flight with frequent flyer points, the airline will still add the fuel surcharge separately.

I agree. I would like to know ALL of the fees broken down and where they go. This is unfortunately not provided.

Furthermore, travel reward miles taxes and other charges are calculated differently and the reward miles company such as Air Miles no say in the matter. this is the prima reason why you should not not be a member if these clubs. I always use cash back rewards system.

Finally, I am shocked that Mexico would charge these outrageous amounts such as a tourist tax. Maybe if the tourists would decide to travel elsewhere for their booze binge the taxes would not be so high.